The former energy CEO will face Iowa state Sen. Joni Ernst (R), former U.S. Attorney Matt Whitaker (R), David Young (R), a former chief of staff to Sen. Chuck Grassley (R-Iowa), and conservative radio host Sam Clovis (R) in a crowded primary.

If no candidate gets 35 percent in next spring's primary the nominee will be chosen by party convention, which establishment Republicans fear could lead to the nomination of a candidate too conservative to win statewide.

Jacobs has the ability to self-fund, however, which may give him a big edge in the race. He's likely to focus his campaign on winning over fiscally conservative, business Republicans.

"He's going to focus on his unique experience as a business executive who's been able to be a problem-solver," the source says.